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Old 02-26-2009, 07:19 AM   #73
BengalMan
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Join Date: Oct 2008
First Name: Ian
Location: Cincinnati, OH
Posts: 1,280
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Default Re: Mikes Cigars loses Oliva.

Guys, your not understanding the fact of state OTP. This is the reason that there is a huge price difference. Take Michigan for example. The state OTP is 32% (there are PLENTY of states that it's higher, much higher). So if a shop buys a box for $100, they immediately at the end of the month, are into the state for $32. So if they keystone the box to $200 (which would be msrp of said box), add the tax, the box is $232 per box. It's impossible for a retailer to go in the hole $32, then take another 10% off MSRP to compete with a major online retailer. Online retailers are for the most part in non-tax states like FL. If they are in a taxed state, they can get around paying the tax if they ship the box out of state, which most of them do. The price difference you see from online shops to local B&M's is due to your home state's legislature, plain and simple. Sure there may be a gouger here and there, but the main price difference is from the state's OTP.

And Sean, please don't just key Oliva as the bad guy, you'd be surprised how many of your favorite cigar manufacturers do the exact same thing in price protecting their brand. I have yet to have a shop in my territory complain to me, or any other rep I know that work for other manufacturers that this is done. Infact, it's just the opposite. Retailers are happy that measures like this are taken by manufactuers to help keep the business coming in.

I will say this though, if you had to pay your states tax on purchases that you bought online and had shipped to you, I think a lot of thoughts may change. It's already happening in small doses, and is a reality in the future. State's see that they're losing tax dollars due to online sales and there is a union of states that have begun getting records and collecting said taxes.

Listen, like I said, I don't know the details of the Mike's situation and it's not my place to comment on it. In the end, some of you are going to support the online shops exclusively, and that's your decision. Some are going to support local B&M's where they see fit and that's their choice. Some may do both, by all means, do what you like. I'm not telling people to go into a place they don't like, or a place where they are treated inferior, or anything of the sort. All I'm saying is if your local B&M is a nice guy, sells a quality product, and provides a service that applies to you, throw him a bone every once in a while. If not, it's your money, and if your going to shop online, there's nothing I can say to stop you.

I'm really busy for the next few days so I doubt I'll be able to check the thread. In the end, I really do acknowledge everyone's opinion's on here and will definitely make note of them, both positive and negative, and bring attention to it to the powers above me so that your opinions are heard. The cigar message boards are a great way for the manufacturers and end users to stay in a two way communication.

Last edited by BengalMan; 02-26-2009 at 07:25 AM.
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